Lordstown’s (RIDE) five-year-long odyssey to bring the Endurance electric truck to market may soon come to an end. The EV startup said Thursday it anticipates production of the Lordstown Endurance will “cease in the near future” with limited funding available.
Lordstown’s journey so far
After going public through a SPAC deal in 2020, Lordstown saw its valuation soar and, along with it, its fan base.
Lordstown was one of the most highly anticipated EV makers, claiming to have secured over 100,000 orders for its Endurance electric truck. However, things began to deteriorate after claims of an inflated order count and a prototype caught fire in 2021.
The pressure mounted as both the CEO and CFO abruptly resigned, leaving the fate of the Endurance up in the air.
Taiwanese manufacturing giant Foxconn stepped in with several funding rounds to revamp the program. Yet, according to an SEC document filed by Lordstown earlier this week, Foxconn is looking to back out of the deal, leaving the EV maker with little choice but to cease Endurance production.
Lordstown expects to cease Endurance production
The news comes after Lordstown received a delisting notice from the NASDAQ stock exchange in April. The delisting notice comes as Lordstown’s stock price has fallen below the $1.00 min for 30 consecutive trading days.
On April 21, 2023, Foxconn sent a letter to Lordstown claiming the company had breached its previous investment agreement due to the stock delisting notice.
Although Lordstown says the breach allegations are without merit, it warned if it doesn’t receive funding, “the company will be deprived of critical funding necessary for its operations,” adding it may need to “curtail or cease operations” or file for bankruptcy.
According to Lordstown’s latest 10-Q filing on May 4, the company now anticipates “production of the Endurance will cease in the near future” without a source of funding.
With Foxconn backing out, losses piling up, and the limited ability to raise funds due to deteriorating market conditions, Lordstown expresses “substantial doubt regarding our ability to continue.”
Electrek’s Take
Building a car company is an extremely capital-intensive task. We are seeing it with nearly every EV maker and legacy automaker going electric, experiencing big losses on each vehicle produced.
That is why we don’t see many new car brands go mainstream. Tesla was one of the first to do so by pioneering the EV sector.
Although many EV makers and other startups thrived in the low-interest environment following the pandemic in 2020, the market has changed drastically since then, with interest rates rising at a historic rate.
As a result, access to cheap capital through equity raises is no longer an option, and with losses piling up, Lordstown says it has limited options.
Author: Peter Johnson
Source: Electrek
